CONFIDENTIAL
- 14 ·
29.
Paragraph 2 of the investment policy, a copy of which is at Appendix I, provides that, as a general guideline, the currency spread of assets, other than those denominated in Hong Kong dollars,
should be:
U.S. dollars
Gold
Other currencies
40 - 65%
2-1/2%
balance
The following table compares the actual distribution of the Fund's
foreign currency assets (including those elements of the loans to
The Ka Wah Bank Limited and First Pacific Bank Limited denominated
in foreign currencies) at 31 December 1987 and 31 December 1986 with
the policy guideline:
Actual 31.12.87
Guideline
Actual 31.12.86
U.S. dollars
56.56
40 - 65%
59.57
Gold
0.60
2-1/2%
0.74
Other currencies
42.84
balance
39.69
100.00
100.00
==
30.
Paragraph 3 of the investment policy states that foreign
currency assets should be maintained at 15% or more of annual
imports, subject to the proviso that sales of Hong Kong dollars to
maintain foreign currency assets at this level should not hinder the use of the Fund to regulate the exchange value of the Hong Kong dollar, and to due regard being given to the need to retain sufficient Hong Kong dollars for the redemption of debt certificates.
31.
As at 31 December 1987, the Fund's foreign currency assets amounted to 30.04% of 1987 total imports (31 December 1986: 30.82%) and to 58.16% (31 December 1986: 55.44%) of retained
imports. Put in another way the Fund's foreign currency assets were equivalent to about 30 weeks (31 December 1986: 29 weeks) average
imports less re-exports.
CONFIDENTIAL